DAR File No. 40993
This rule was published in the December 1, 2016, issue (Vol. 2016, No. 23) of the Utah State Bulletin.
Health, Administration
Rule R380-400
Use of Statistical Sampling and Extrapolation
Notice of Proposed Rule
(Repeal)
DAR File No.: 40993
Filed: 11/14/2016 09:13:00 AM
RULE ANALYSIS
Purpose of the rule or reason for the change:
Based on its five-year review, the Department has determined that this rule no longer applies to changes in state law that govern extrapolation procedures in provider audits. The Department, therefore, will repeal this rule in its entirety.
Summary of the rule or change:
This rule governs the methodology for statistical sampling and extrapolation on services covered by Title XIX of the Social Security Act. Nevertheless, this rule no longer applies to extrapolation procedures, and is therefore repealed in its entirety.
Statutory or constitutional authorization for this rule:
- Section 26-18-3
- Section 26-1-5
Anticipated cost or savings to:
the state budget:
There is no impact to the state budget because this rule no longer applies to extrapolation procedures and does not govern provider audits.
local governments:
There is no impact to local governments because they neither reimburse Medicaid providers nor provide Medicaid services to clients.
small businesses:
There is no impact to small businesses because this rule no longer applies to extrapolation procedures and does not govern provider audits.
persons other than small businesses, businesses, or local governmental entities:
There is no impact to Medicaid providers because this rule no longer applies to extrapolation procedures and does not govern provider audits. Additionally, there is no impact to ongoing services available to Medicaid clients.
Compliance costs for affected persons:
There is no impact to a single Medicaid provider because this rule no longer applies to extrapolation procedures and does not govern provider audits. Additionally, there is no impact to ongoing services available to a Medicaid client.
Comments by the department head on the fiscal impact the rule may have on businesses:
There is no fiscal impact on business because this rule no longer applies to extrapolation procedures that are currently governed by statute.
Joseph K. Miner, MD, Executive Director
The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:
HealthAdministration
CANNON HEALTH BLDG
288 N 1460 W
SALT LAKE CITY, UT 84116-3231
Direct questions regarding this rule to:
- Craig Devashrayee at the above address, by phone at 801-538-6641, by FAX at 801-538-6099, or by Internet E-mail at cdevashrayee@utah.gov
Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:
01/03/2017
This rule may become effective on:
01/10/2017
Authorized by:
Joseph Miner, Executive Director
RULE TEXT
R380. Health, Administration.
[R380-400. Use of Statistical Sampling and Extrapolation.
R380-400-1. Purpose and Authority.
This rule governs the methodology for statistical
sampling and extrapolation on services covered by Title XIX of
the Social Security Act. This rule is authorized by Sections
26-1-5, 26-18-3, and 26-18-605.
R380-400-2. Definitions.
Definitions for the purposes of this rule are as
follows:
(1) "Billing Codes" means the current codes
that may be billed to the Department and may consist of currently
used DRG Codes, CPT Codes, HCPC Codes, or other nationally or
locally accepted codes.
(2) "Confidence Interval" means a range of
values within which a pattern of error is statistically estimated
to lie.
(3) "Confidence Level" means the probability
that the value of a parameter falls within a specified range of
values.
(4) "Cost Effective" means provides the
greatest estimated return of recoveries for overpayments relative
to cost considering the available alternatives.
(5) "Diagnostic Related Groups (DRG)" means a
group of related medical conditions used to establish
reimbursement.
(6) "Dollar Error Rate" means the percentage of
the total dollars in the initial sample found to be overpayments
to the total dollars in the initial sample.
(7) "Error Types" means overpayments with a
similar cause or result. For purposes of this rule, error types
are limited to the following:
a. Insufficient or no documentation to support services
billed, medical necessity, diagnosis codes, or billing
codes.
b. Upcoding.
c. Incorrectly Unbundled services.
d. Incorrect billing code combinations.
(8) "Extrapolation" means an estimate of
overpayments in claims that lie beyond the range of observation
taken from a universe of records.
(9) "Initial Sample" means a statistically
valid random sample of claims from the universe of records from a
period not less than three months and not more than eighteen
months, used to establish a pattern of error.
(10) "Standard deviation" means a statistical
measure of variability that reflects the typical deviation from
the mean of a distribution.
(11) "Overpayment" means any amount paid by the
Department to a provider which is in excess of the amount allowed
either through fraud, waste or abuse; a mistake; the lack of
appropriate documentation; billing errors; errors caused either
by the department, Reviewing Agency, provider, or a mechanized
claims processing system; or payments not allowed under part 1902
of the Social Security Act or in violation of state rules or
federal regulations, or Federally published policies.
(12) "Pattern of Error" means a transaction
error rate of 10% or more, or a dollar error rate of 5% or more,
found in the initial sample.
(13) "Random Sample" means a statistically
valid sample drawn from the universe of records by chance; a
sample drawn in such a way that every item in the universe of
records has an equal and independent chance of being included in
the sample.
(14) "Review" means the process in which the
Reviewing Agency will select a universe of records to be sampled
to determine the appropriateness of a claim. Factors used to
assess appropriateness will include medical necessity;
appropriate documentation; compliance with department, state and
federal program policies, rules, regulations, statutes, and laws;
and adherence to contract requirements.
(15) "Reviewing Agency" means any state agency,
or other entity acting on behalf of a state agency, authorized by
state or federal law to perform reviews, which include samples of
claims filed for a public benefit funded with state or federal
funds administered by the Department.
(16) "Sampling Methodology" means the use of
the sampling tool, by certified users, developed by the Texas
Department of Health and Human Services version 2009, which is
hereby incorporated by reference, to select a random sample from
a universe of records in order to calculate a dollar error rate
for means of extrapolating an overpayment in a universe of
records.
(17) "Transaction Error Rate" means the
percentage of claims in the sample containing overpayments to the
total number of claims in the sample.
(18) "Underpayment" means any amount paid by
the Department to a provider which is less than the amount
allowed under part 1902 of the Social Security Act or state rules
or federal regulations, or federally published policies.
(19) "Universe of Records" means the total
number of claims based on a single provider and for services for
a single billing code, for dates of service up to 36 months prior
to the date of the review.
(20) "Risk Assessment" means the identification
of the level of risk of overpayments involved with the universe
of records.
R380-400-3. Use of Sampling Methodology.
The Reviewing Agencies' procedures for performing
reviews include the use of the sampling methodology.
R380-400-4. Initial Review to Determine Dollar and
Transaction Error Rates and Need for Extrapolation.
(1) The Reviewing Agency, based on a review, of the
initial sample of claims, will determine whether a pattern of
error is present.
(2) Following a review of the initial sample, if a
pattern of error was found and the Reviewing Agency, at its sole
discretion, concludes it is cost effective, and that the error
rate lies within 2.5 standard deviations of the mean, the
Reviewing Agency may proceed with extrapolation based on
reviewing the results from a random sample. If the error rate of
the random sample lies outside 2.5 standard deviations of the
mean of the initial sample and the error rate is lower than 2.5
standard deviations from the mean of the initial sample,
extrapolation shall not be applied and only those errors
discovered will be considered as overpayment.
(3) When extrapolation is applied, sampling methodology
will be used to extrapolate the dollar and transaction error rate
within the universe of records. The statistical random sample
will be of sufficient size to achieve a confidence interval of
95% and a confidence level of plus or minus 5%. The dollar and
transaction error rates will be determined based on the results
of the statistical sample.
R380-400-5. Initial Sample Size Determination.
(1) Referrals will be processed through any
federally-approved fraud and abuse detection software (FADS)
tool, when access to such a tool is available.
(2) The Risk Assessment will be considered
"moderate" unless the risk assessment is determined to
be either "high" or "low."
(3) The Risk Assessment will be considered
"high" when any of the following are true:
a. The claims being considered for review are indicated
to be aberrant by the use of a FADS tool, when access to such a
tool is available, or by the use of any data-mining
analysis.
b. The applicable provider type is classified, as of the
date of the review, as "high" risk in the CFR for
initially categorizing provider risk. See Federal Register/Vol.
76, No. 22/Wednesday, February 2, 2011/Rules and Regulations,
pages 5895-5896, which is incorporated by reference.
c. The provider is operating during the first 12 months
after signing a provider agreement. If the provider is considered
"high" risk during any period of a review, then the
provider is considered "high" risk during the entire
period of the review.
(4) The Risk Assessment will be considered
"low" when the risk assessment has not been determined
to be "high" and when all of the following are
true:
a. The applicable provider type is classified, as of the
date of the review, as "low" risk in the Federal
Register for initially categorizing provider risk.
b. The Reviewing Agency, based on any previous review of
the same provider, assumes both the dollar and transaction errors
in the initial sample are likely to be below the pattern of
error.
c. The Reviewing Agency, based on any previous reviews
involving the same provider type, assumes both the dollar and
transaction errors in the initial sample are likely to be below
the pattern of error.
(5) The statistically valid sample size table for initial
samples is as follows in Table 1:
TABLE 1
Risk Universe of Records Universe of Records
Assessment > = 250 Claims < 250 Claims
High 100 80
Moderate 75 60
Low 50 40
R380-400-6. Overpayments and Underpayments.
The dollar amount of the extrapolated overpayment will be
computed by applying the dollar error rate of the statistical
random sample to the total dollar amount actually paid the
provider as documented from the universe of records. If the
review establishes that any claims from the universe of records
should have been paid at a lesser amount, then only the
difference between the total amount actually paid to the provider
and the lesser amount that should have been paid to the provider
will be used to calculate the dollar error rate. Any
underpayments discovered during a review will offset the final
total dollar amount of the overpayment. The final total dollar
amount of the overpayment will constitute a debt by the provider
to the Department.
R380-400-7. Provider Notification Requirements.
(1) When extrapolation is not applied after the initial
sample, notice will be sent to the provider of the
following:
a. The opportunity to request a hearing.
b. The criteria used to determine the initial
sample.
c. The dollar and transaction error rates.
d. The size of the sample.
e. The specific claims sampled.
f. The reason(s) for the overpayments.
g. The actual total dollar amount of the total
overpayments specifically identified to be recovered.
(2) When a statistical sample has been reviewed and
extrapolation has been applied, notice will be sent to the
provider of the following:
a. Items (1) a. through f. above in R380-400-7 as applied
to the initial sample and the statistical sample.
b. Total underpayments noted.
c. The final total dollar amount of the overpayment based
on extrapolation.
R380-400-8. Administrative Hearing Appeals and Burden of
Proof.
If a provider appeals an action of the Department or
Reviewing Agency regarding a claim based on statistical sampling
using this rule's methodology, the action shall be deemed to
satisfy the Department's or Reviewing Agency's burden of
providing evidence sufficient to establish the claim, unless
rebutted by the provider.
KEY: Medicaid
Date of Enactment or Last Substantive Amendment: November
22, 2011
Authorizing, and Implemented or Interpreted Law: 26-1-5;
26-18-3]
Additional Information
More information about a Notice of Proposed Rule is available online.
The Portable Document Format (PDF) version of the Bulletin is the official version. The PDF version of this issue is available at https://rules.utah.gov/publicat/bull-pdf/2016/b20161201.pdf. The HTML edition of the Bulletin is a convenience copy. Any discrepancy between the PDF version and HTML version is resolved in favor of the PDF version.
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For questions regarding the content or application of this rule, please contact Craig Devashrayee at the above address, by phone at 801-538-6641, by FAX at 801-538-6099, or by Internet E-mail at cdevashrayee@utah.gov. For questions about the rulemaking process, please contact the Office of Administrative Rules.